You are currently viewing Giving the Gift of Real Estate Episode 008

Giving the Gift of Real Estate Episode 008

Episode 8: Giving the Gift of Real Estate

Here are some links to learn more about giving the gift of real estate.

How to Complete a Gift Letter for a Mortgage Down Payment

Understanding Property Deeds

Tax Information on Donated Property

Transcript  Giving the Gift of Real Estate – Episode #008

Welcome to another episode of the Agent On Duty podcast. This is episode 8 recording during the Christmas holiday season and getting ready for the new year. I am John Marion and I am the Agent On Duty. This episode is about giving the gift of real estate.

This is a great time of the year to talk about gift giving. But what about giving real estate as a gift? How does that work?

I’m going to tell you about 3 ways you can give the gift of real estate.

Giving the gift of real estate obviously benefits the receiver of the gift. And you can also benefit greatly as the giver!

Let’s get right into today’s episode with the first way you can give the gift of real estate.

Number 1 – The Gift Letter

The first way to give the gift of real estate is to give your loved one money toward their down payment to buy a home. Do you have a family member who needs some more money for their down payment? Mortgage lenders will allow you to write a gift letter and transfer funds to the buyer so that they become eligible to buy a home. This is a great way to help a loved one to get on the path toward home ownership.

There are restrictions of who is eligible to give a gift to a home buyer. It’s usually a relative of the buyer.

Check with a mortgage lender for to exact details about writing a gift letter and if you are eligible to give a gift toward someone’s down payment. In a previous podcast episode I talked about the fact that real estate transactions require a team of professionals. One of the key members on the team is a mortgage lender.

So check with a mortgage lender for more info. I’ll also provide a link to learn more about the gift letter.

Number 2 – Sign the Deed to Give the Property to Someone

The second way you can give the gift of real estate is to simply sign the deed over to the recipient.

If you own a property, any type of real estate, residential (a house, townhouse, or condo for example) or land or any other type, such as commercial property, you can outright transfer the ownership from you to someone else as a gift.

The transfer of property this way often happens in an estate situation after someone has passed away and the heirs inherit the property. But you don’t have to wait for that to happen. You can give away your property now!

If this is something that you would consider doing, I’d suggest you check with and accountant and or a financial planner and a real estate attorney. Signing the deed of a property you own over to someone else may or may not trigger reporting to the IRS and result in tax consequences for you or the recipient of your gift.

Unlike the first way of giving – which is restricted to who may be eligible to receive your gift – this second way of giving by signing the deed over to the recipient is not restricted.

You can give your property to whoever you want!

Number 3 – Donate the Property to a Nonprofit Organization

The third way of giving the gift of real estate can result in a huge benefit for you and you can impact the lives of many people far into the future.

This is giving your real property to a non-profit organization. This can be a religious organization, like a church or it can be a non-profit organization serving any number of causes (medical research, hospitals, homeless shelters, organizations that feed the poor, etc.)

The benefit of giving your real estate as a gift to a non-profit organization can be profound for you and the recipient. I’m going to take a few minutes to explain what I mean.

First of all, you may benefit greatly by the tax deduction you can take when you file your income taxes. You will definitely want to consult with a tax professional, an accountant and maybe a financial planner, to make sure you understand the benefit and transfer the real estate in a way that makes the most sense for your situation.

Second, you can make a profound, positive impact on people now and on the lives of future generations far into the future. Here are a few examples of what I mean.

Let’s say you own a house that is situated near a hospital and if the hospital owned that property, they can put it to good use to help them better serve the needs of the community. Maybe the hospital specializes in a certain medical procedure for children diagnosed with a rare disease.

Let’s also say that they donate the cost of the care but when the parents are in town during the medical procedure, staying in a hotel would be a severe financial burden for some families. The hospital may want to put your property to use by making it available for the parents to stay while their child is in the hospital. Can you see how great and wonderful your gift of real estate can be to impact the lives of people in positive way?

Here is another example. This is a real life example and is my favorite story about giving real estate. I had this experience many years ago with a church that I attended.

The congregation was looking for a plot of land to build a church.

They had spent years renting a facility and they were ready to find land and build. They had limited resources so they were looking for a great deal.

The pastor found out about a situation where a family owned a number of acres of land nearby. He met with the family and learned that they had inherited the land and the IRS was demanding the payment of income taxes based on the value of the land. The land they owned was valuable and they wanted to keep it in the family but they were cash poor. The couldn’t come up with the funds to keep their land and they didn’t want to sell it to developers.

What they did instead was give the land to the church to build on a certain location of the land that the congregation needed for the building and parking lot. And the church would preserve the undeveloped nature of remaining acreage. This was a win-win in so many ways.

The family got the IRS off their back, the congregation received land and built their church, and the family had access to enjoy the undeveloped acreage which was situated right next to the house where they lived.

The church has been their now for about 30 years and the congregation has done many, many good things in the community to help the lives of many people.

Yes, this is my favorite story about giving the gift of real estate! As a matter of fact, I’m thinking out loud as I speak. Maybe I’ll track down Pastor Kevin and see if he can come on the show sometime in the future to talk about his experience receiving the gift of real estate for his congregation and the long term impact that gift has had on the lives of many people.

You donation of real estate to a non-profit can be any type of real estate. A church may put a house you have to good use when you give it to them. Or they may have members in the congregation with resources to make improvements on the property to use it for what they need or they sell it to help them raise funds for a worthwhile project that serves the community.

RECAP of 3 Ways to Give the Gift of Real Estate

Here is a recap of the 3 ways you can give the gift of real estate.

  1. Write a gift letter and give money to help a loved one with a down payment to buy a house.
  2. Sign the deed of a property you own over to someone else as an outright gift.
  3. Donate your real estate to a non-profit organization, such as a church.

I’m going to provide links in the show notes with more information for you to learn about giving the gift of real estate.

Go to innovativeproperties.com/podcast to access the information and links.

To access the information mentioned in this podcast, visit my website,

https://www.innovativeproperties.com/podcast

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